Seventeen NHS nurses at a cottage hospital in Herefordshire have been told they must work for a profit-making private health company if they want to keep their jobs, the Telegraph reports today.

Such a move is in direct contadiction to statements by health secretary, Alan Milburn, that NHS staff will not transfer out of the NHS if private companies take over the running of hospitals or units.

A spokesman for the Department of Health said that "nothing had been signed" at the hospital, and claimed that "nurses are being offered a choice of whether they want to work in the NHS elsewhere or would like to transfer."